Profits tumble 57.5% at Rovio, despite rising games revenue
Angry Birds 2 pulls in €29.7 million but developer admits it “did not see the growth we wanted” from other games
Near record-breaking games revenue at Rovio has done little to offset a 57.5 per cent decline in operating profit at the Finnish developer, falling from €14.1 million to €6 million year-on-year.
Games revenue last quarter enjoyed a 6.4 per cent year-on-year increase from €61.3 million to €65.3 million.
The growth was attributed to record-level spending on user acquisition of €22.9 million for the quarter, up from €15.1 million over the same period last year, equal to over a third of the the company's total game revenue.
The effects of this increased spending were demonstrated by a 44 per cent year-on-year growth of Angry Birds 2 revenue, which reached €29.7 million for the period.
Additionally, while gross bookings for Angry Birds Friends grew 11 per cent compared to the previous quarter, and Angry Birds Match also grew, Rovio admitted that it "did not see the growth we wanted" from its other games.
"The amount of daily and monthly active users also improved from previous quarter and so did the average revenue per daily active users," said said CEO Kati Levoranta.
"The number of monthly unique payers reached an all-time high of 581,000."
Ultimately, operating profit from the company's game sector were still down 13.8 per cent from €10.1 to €8.7.
Group revenue for the period was also down, declining 16.7 per cent from €86.2 million to €71.8 million; this drop was largely attributed to the peak in revenue from the Angry Birds Movie in Q2 2017.
Brand licensing revenue fell 73.8 per cent from €24.9 million to €6.5 million, resulting in operating profit downturn of 82.7 per cent from €5.8 million to €1 million in the sector.
"The revenue of Rovio's Brand Licensing Unit was, as expected, lower year-on-year mainly due to fact that a large chunk of The Angry Birds Movie income was recognized in the second quarter last year," Levoranta. Added.
"This quarter, the Brand Licensing Unit launched the licensing program for The Angry Birds Movie 2 in Las Vegas, and has signed licensing contracts with many top consumer brands such as Chupa Chups, Crocs, and Pez."
Finally, earnings per share were down by 46.1 per cent from €0.13 to €0.07.